Chapter 4
Under the statute of frauds, certain agreements must be in writing to be enforceable. For example, if you and your neighbor, Alice, orally agree that you will sell her your car for $6000, the agreement will not be enforceable under the UCC sale-of-goods statute of frauds.1 As the first sentence implies, however, not all contracts must be in writing. This chapter discusses the kinds of agreements that must be in writing to be enforceable. In addition, we discuss what a writing must entail to satisfy the statute of frauds. Further, we examine certain exceptions to the writing requirement in cases that ordinarily would require a writing.
Well, I have only written one paragraph in this chapter and already I must issue a caveat. Contract law is trying to keep up with dramatic technological advances in communication. In the computer age, we are all making contracts online and even via e-mail. “Writings” may soon be largely a thing of the past. So, a proposed amendment to the statute of frauds for the sale of goods requires only the “authentication or adoption” of certain contracts in a “record.”2 A record includes a writing, but also information stored in a computer.3 Technology has also driven changes in laws affecting the statute of frauds for other kinds of agreements. Laws in flux can be challenging to describe. My strategy in this chapter will be to discuss the traditional statute of frauds, but to supplement the discussion by highlighting some proposed or adopted changes.
As you read this chapter, please also bear in mind another point that often confuses students. Up to this point in this book, we have focused on the requirements for an enforceable agreement, promise, or obligation. This chapter discusses an additional requirement for some agreements, namely a writing (or record). But (and here comes the confusing part), ordinarily, a writing does not make an otherwise unenforceable agreement enforceable. For example, a writing does not make an agreement enforceable if it lacks consideration or is too indefinite, and so on.
A. BACKGROUND
The statute of frauds was first adopted in England in 1677,4 and each of our state legislatures has enacted a statute of frauds much like the English version.
The Hawaii statute of frauds (a representative example we shall employ throughout this chapter), provides a list of contracts that must be in writing to be enforceable:
Certain contracts, when actionable. No action shall be brought and maintained in any of the following cases:
(1)To charge a personal representative, upon any special promise to answer for damages out of the personal representative’s own estate;
(2)To charge any person upon any special promise to answer for the debt, default, or misdoings of another;
(3)To charge any person, upon an agreement made in consideration of marriage;
(4)Upon any contract for the sale of lands, tenements, or hereditaments, or of any interest in or concerning them;
(5)Upon any agreement that is not to be performed within one year from the making thereof;
(6)To charge any person upon any agreement authorizing or employing an agent or broker to purchase or sell real estate for compensation or commission;
(7)To charge the estate of any deceased person upon any agreement which by its terms is not to be performed during the lifetime of the promisor * * *
unless the promise, contract, or agreement upon which the action is brought, or some memorandum or note thereof, is in writing, and is signed by the party to be charged therewith, or by some person thereunto by the party in writing lawfully authorized.5
In addition to the traditional categories enumerated above, we will study one other category of agreement that requires a writing, namely sales of goods (of $500 or more).6 UCC section 2–201(1) provides: “[A] contract for the sale of goods for the price of $500 or more is not enforceable by way of action or defense unless there is some writing sufficient to indicate that a contract for sale has been made between the parties and signed by the party against whom enforcement is sought * * *.”
England abolished most provisions of its statute of frauds in 1954, but our states have preserved it. To understand why the statute of frauds is controversial, we must think about the reasons for the writing requirement in the first place. England enacted the statute of frauds to combat fraud by people who might falsely claim they had an oral contract.7 For example, the statute of frauds protects you from Alice’s false claims that you agreed to sell her your car (assuming you did not). The notion of a statute of frauds made a lot of sense when it was enacted in 1677 because, at that time, the party claiming the existence of a contract could not testify at trial or be cross-examined.8 In addition, judges of the time had much less control over jury decisions that were against the weight of the evidence.9
As procedural reforms made fact finding by juries much more reliable, reformers feared that the statute of frauds now caused as much or more fraud than it prevented.10 English lawmakers were concerned that people who had actually made oral agreements could use the absence of a writing as a shield to avoid their commitments.11 Suppose you actually had agreed to sell Alice your car, and now you were hiding behind the statute of frauds (shame on you). Notwithstanding this concern, our lawmakers see reasons to retain the statute of frauds.12 For example, a writing helps satisfy the cautionary and evidentiary functions, a subject we took up in Chapter 2, when we investigated the purposes of the requirement of consideration.13 You don’t remember and are too tired to look up the footnote cite? Well, the theory is that you understand the seriousness of what you are doing when you put your contract to sell your car in writing. And, of course, the writing serves as a memorial of the agreement you made.
Notwithstanding the statute of fraud’s continuing role in this country, judges resist employing it when they are convinced the parties actually made an oral agreement. As a result, judicial decisions have gradually reduced the impact of the rule by interpreting the categories of contracts that require a writing narrowly. For example, as one court has stated:
[A] promise to pay the debt of another has been construed to encompass only promises made to a creditor which do not benefit the promisor (Restatement of Contracts § 184 (1932)); 3 Williston, Contracts § 452 (Jaeger ed. 1960); a promise in consideration of marriage has been interpreted to exclude mutual promises to marry (Restatement, supra § 192; 3 Williston, supra § 485); a promise not to be performed within one year means a promise not performable within one year (Restatement, supra § 198; 3 Williston, supra § 495); a promise not to be performed within one year may be removed from the Statute of Frauds if one party has fully performed (Restatement, supra § 198; 3 Williston, supra § 504); and the Statute will not be applied where all promises involved are fully performed (Restatement, supra § 219; 3 Williston, supra § 528).14
We’ll look further at some of these judicial contractions of the statute of frauds shortly.15
Not only have courts whittled down the categories presented in the original statute of frauds, they have created exceptions. For example, part performance usually is enough to avoid the writing requirement.16 In addition, courts use other theories to enforce a promise that the statute of frauds would normally bar. For example, a court may enforce an oral promise based on the theory of promissory estoppel or unjust enrichment.17
We now proceed to consider more systematically the major issues that arise under the statute of frauds. First, does the statute of frauds apply? Second, does a writing satisfy the statute? Third, does an exception to the writing requirement apply? Finally, is a promise that is unenforceable for lack of a writing still enforceable under another theory, such as promissory estoppel or unjust enrichment?
B. DOES THE STATUTE OF FRAUDS APPLY?
Look again at the Hawaii statute of frauds set forth above.18 Add UCC section 2–201, which requires a writing for the sale of goods of greater than $500,19 and the list of transactions that require a writing is quite complete. (Of course, various states have enacted additional writing requirements, but don’t sweat these unless your teacher has assigned them for study.)
Many contracts courses focus on three categories of contracts that must be in writing for enforcement. These are contracts for the sale of land or any interest in land (subsection 4 of the Hawaii statute), contracts that cannot be performed within one year from the time of contract formation (subsection 5 of the Hawaii statute), and contracts for the sale of goods (UCC section 2–201). Let’s discuss each of these briefly.
Contracts for the sale of land must be in writing.20 That is easy enough. But don’t forget that contracts for “any interest in or concerning” land also must be in writing to be enforceable.21 A lease of your apartment, therefore, requires a writing. An oral promise of a leasehold won’t do.22
Law professors have lots of fun with contracts that are “not to be performed within one year from the making thereof.”23 Recall that courts have whittled down this category to require a writing only when the promise cannot be performed in a year.24 So, if you hire a young man to work for you for his life, the statute of frauds does not require a writing. The contract can be performed within one year, if (God forbid) the young man dies in a week.25 He worked for you for his life. But if you hire a 98-year-old man to work for you for 366 days, even though he was diagnosed with a terminal case of the plague when he was 80 and given one year to live (he’s a walking miracle), the statute of frauds requires a writing. The contract to employ the 98-year-old man cannot be performed in a year, even though he might die before 366 days pass. The old guy’s death would end the contract, but the contract would not have been performed, it would only be excused.26
The revisers of Article 2 were spoilsports and tried to take all the fun out of sale-of-goods contracts that fall under the longer-than-one-year statute of fraud’s category. They wrote a new subsection that states: “A contract that is enforceable under this section is not unenforceable merely because it is not capable of being performed within one year or any other period after its making.”27 Contracts for more than one year do not have to be in writing under amended Article 2, but no state has adopted the amendment.
As I already mentioned several times (try to listen), section 2–201 of the UCC requires a writing when the sale of goods is “for the price of $500 or more.” But another proposed amendment to section 2–201 showed the effect of inflation. Under the amendment, contracts for the sale of goods of a price of $5000 or more require a writing.28 This provision is currently not the law in any state.
C. DOES A WRITING SATISFY THE STATUTE OF FRAUDS?
1.The Nature of the Writing
If the statute of frauds requires a writing, what kind of writing will suffice? The Hawaii statute of frauds’ answer is typical: A party seeking to enforce a “promise, contract, or agreement” must show a writing or “some memorandum or note thereof * * * signed by the party to be charged therewith, or by some person thereunto by the party in writing lawfully authorized.”29 Let’s translate this from legalese into English.
The actual “promise, contract, or agreement” that the promisee is trying to enforce must be in writing, or at least be referenced in “some memorandum or note” in writing that proves the existence of the “promise, contract, or agreement.”30 The point is that the statute of frauds does not require a formal written contract, just something in writing that proves the contract’s existence. In order to satisfy such a proof requirement, the writing must “reasonably identif[y] the subject matter of the contract”31 (for example, “sale of house at 313 Windsor Drive”), and include “with reasonable certainty the essential terms of the unperformed promises in the contract” (for example, identify the price).32 Several writings as a group may satisfy these statute of frauds requirements, so long as at least one of them is signed by the promisee.33 When there are several writings, the signed writing must establish “a contractual relationship between the parties,”34 the unsigned documents must refer expressly to the same agreement,35 and evidence must prove the relationship of the unsigned and signed documents.36
A writing may satisfy the statute of frauds even if the parties did not intend to contract or to create evidence of a contract.37 For example, suppose you and Alice contemplate the sale to her of your residence at 313 Windsor Drive. You write a letter to her referring to the sale of 313 Windsor Drive, even before reaching a final agreement. The letter may satisfy the statute of frauds against you. Remember, however, that this does not mean that you are liable to Alice if you decide not to sell the property. You can still prove that you never completed a contract to sell the property. All that we are saying here is that you cannot use the defense of a lack of writing under the statute of frauds.
UCC section 2–201 also provides that an informal writing satisfies the statute of frauds. The language of section 2–201(1) requires only “some writing sufficient to indicate that a contract for sale has been made between the parties * * *.”38 So, under the UCC, you can write a memorandum for the sale of your car on the back of a receipt in a restaurant where you and Alice have ironed out the deal, and, if you both sign it, neither of you will have a statute of frauds problem.39
The last sentence of section 2–201(1) provides that “[a] writing is not insufficient because it omits or incorrectly states a term agreed upon * * *.” However, a contract based on a flawed writing is not enforceable “beyond the quantity of goods shown in such writing.” Under this provision, the parties don’t have to get everything straight in their writing. Parties can prove that the terms are different from the writing. However, a party cannot prove a contract beyond the quantity of goods stated in the writing. If the writing says two giraffes, the seller can’t prove three giraffes.40
Notwithstanding the informality of the writing requirement, I beg of you, I plead with you, bear in mind the admonition at the beginning of this chapter: Even if a promisee produces a formal or informal writing that satisfies the statute of frauds, she has not won the war. She has satisfied the statute of frauds, but she still must contend with all of the issues of contract enforceability we are learning about in this book, such as whether she supplied consideration to support the promise, whether a reasonable person would believe the parties intended to contract (of course, the writing is evidence of intention), whether the contract is sufficiently certain, and so on and so on.
2.Who Must Sign
The definition of “signed” is very broad and largely uncontroversial. The UCC approach is typical: “ ‘Signed’ includes using any symbol executed or adopted with present intention to adopt or accept a writing.”41 You can sign a writing with an “X,” if you executed that symbol intending to accept the writing.42 The harder statute of frauds question is: Who must sign?
Under the Hawaii statute of frauds, the writing must be signed “by the party to be charged therewith,” meaning the party who breaks a promise.43 So, stifle that false impression that most people have about signing contracts that require a writing, namely that both parties must sign. UCC section 2–201(1) makes this even more explicit for sale-of-goods cases: The writing must be “signed by the party against whom enforcement is sought * * *.”44 The net result is that if you and Alice draft a written contract for the sale of your car for $6000, signed only by you, Alice can sue you if you don’t deliver the car, but you cannot sue Alice if she repudiates the contract before delivery. Life is sometimes unfair. (If you deliver the car, however, you can sue for breach of contract under the part-performance exception or you can sue for unjust enrichment, but we are getting ahead of ourselves.45)
Both the Hawaii and UCC statute of frauds also provide that an authorized person may sign the writing on behalf of a contracting party.46 The law of agency governs the meaning of “authorization,” a subject beyond the scope of most first-year contracts courses.
3.Electronic Contracts
More and more, people are purchasing goods and services online and making contracts via e-mail exchanges. (You didn’t need me to tell you this.) A largely paperless society may be in our future.47 Perhaps you have wondered whether your purchase of a $700 air conditioner online or your contract with Alice to mow her lawn for two years made through the exchange of e-mails satisfies the statute of frauds. After all, you didn’t sign a piece of paper in either case. Both contracts satisfy the statute of frauds.48
In the sale of goods context, many states have adopted revised Article 1 of the UCC, which includes definitions of “signed” (“using any symbol executed or adopted with present intention to adopt or accept a writing”) and “writing” (“includes printing, typewriting, or any other intentional reduction to tangible form.”).49 Courts reason that electronic contracts are reduced to tangible form because they are saved on a hard drive and because they can be printed on paper.50 Courts feel comfortable with this determination in part because of the UCC’s liberal approach to the writing requirement in section 2–201.51 The Uniform Electronic Transactions Act (UETA), enacted by most states, authorizes the use of electronic signatures, including in transactions formed through e-mail exchanges.52
In 2000, new federal legislation was passed allowing parties to execute binding online contracts using electronic signatures.53 The law governs, among other things, banking, insurance and brokerage contracts.54
D. DOES AN EXCEPTION TO THE WRITING REQUIREMENT APPLY?
Even if the statute of frauds applies to an oral transaction, an exception may “take the case out of the statute” (legalese meaning that contract law does not require a writing when an exception applies). The most prominent example is part performance.55 But what exactly constitutes part performance and when does the exception apply?
Let’s start with section 2–201(3)(c) of the UCC, which codifies the part performance rule for sales of goods: A contract that does not satisfy the statute of frauds is enforceable “with respect to goods for which payment has been made and accepted or which have been received and accepted * * *.”56 Note that under the section, the contract is enforceable only to the extent of the part performance. You orally agree to sell Alice three pianos (don’t ask for realism in all my hypos) for $6000. You deliver one of the pianos, which she accepts, but she does not pay. The statute of frauds is no impediment to your claim for payment for the piano you delivered, but it would bar full enforcement of the contract for the sale of three pianos. Likewise, if you had failed to deliver any pianos after Alice paid for one of them, she could enforce the contract for only one piano.57
Suppose you orally agreed to sell one piano to Alice for $2000, and she paid you a portion of the purchase price, say $500. She is not limited to enforcing a contract for only one quarter of the piano. Most courts allow her to enforce the entire contract, free from a statute of frauds defense.58 Remember, however, all she has shown by proving the $500 payment is that the statute of frauds doesn’t apply; in order to recover, she still must prove the other prerequisites for contract enforcement, including agreement and consideration.59 (I hope you don’t mind that I keep making this crucial point.)
Restatement (Second) of Contracts, section 129, sets forth an approach for contracts involving land that is both narrower and broader than Article 2’s part performance doctrine (don’t worry, I’ll explain this):
A contract for the transfer of an interest in land may be specifically enforced notwithstanding failure to comply with the Statute of Frauds if it is established that the party seeking enforcement, in reasonable reliance on the contract and on the continuing assent of the party against whom enforcement is sought, has so changed his position that injustice can be avoided only by specific enforcement.60
In cases involving money damages for the breach of an oral land-sale contract, courts have been reluctant to apply the part performance exception to the statute of frauds (meaning that the statute bars money damages even if the injured party has partially performed).61 So, the treatment of the part-performance exception in land sale contracts is narrower than for sales of goods. On the other hand, the Restatement rule creates a broader exception when the action is for specific performance. The express language of Restatement (Second) section 129 authorizes specific performance of an oral land sale when the injured party has “change[d] * * * position” in reliance on the oral contract. A change of position is broader than part performance.62 For example, part performance by a buyer would include paying all or part of the purchase price and taking possession of the land.63 But a buyer also changes position, for example, when she makes improvements on the subject property with the seller’s assent.64 Obviously, the more of these acts the purchaser completes the better for avoiding the statute of frauds, because the real question is whether the purchaser’s actions tend to show that the parties really made a contract.65
UCC section 2–201 sets forth several additional exceptions to the statute of frauds specific to the sale of goods. Section 2–201(2) applies to contracts between merchants. (To review, merchants “deal” in the kind of goods the contract concerns or represent to the public that they have “knowledge or skill peculiar to the practices or goods involved in the transaction* * *.”66) Section 2–201(2) provides that when two merchants make an oral contract and one of them sends a written confirmation that is sufficient to satisfy the statute of frauds against the sender, and the recipient “has reason” to know its contents, the writing is good against the recipient, even though she did not sign it. The recipient has an opportunity to reject the confirmation, if she acts quickly. If she notifies the sender in writing within ten days of receiving the confirmation that she objects to “its contents,” then the statute of frauds still applies.67 Under this “merchant” exception to the signature requirement, merchants cannot safely avoid contracts simply by refusing to sign anything. Merchants had better read their mail. In fact, a confirmation suffices under the section even if it contains no “explicit words of confirmation nor express references to the prior agreement * * *.”68
Another exception to the writing requirement in cases involving sales of goods is the “specially manufactured goods exception.”69 Under UCC section 2–201(3)(a), a writing is not required when goods are to be “specially manufactured” so that they are suitable only for the buyer, and the seller has started producing the goods or has committed to obtain them in circumstances that “reasonably indicate that the goods are for the buyer.”70 Suppose I quit teaching law and become a full-time fiction writer (probably a bad idea). I pick up the telephone and order a $600 sign for my office that says, “Bob Hillman’s Writing Sanctuary.” If the manufacturer has begun making the sign by carving my name on it, the statute of frauds will not bar the manufacturer’s lawsuit against me if I repudiate the oral contract. All of the requisites of section 2–201(3)(a) are satisfied. The goods are specially manufactured, are suitable only for me (remember the sign includes my name), and are already under production. The reason for section 2–201(3)(a) should not be difficult to surmise: “The long-accepted justification for this statutory rule lies in the assurance that, by virtue of the unique nature of the goods, the manufacturer would not have produced such unique goods absent an agreement with the alleged buyer.”71
Still another exception to the statute of frauds in sale-of-goods cases is section 2–201(3)(b). This section reverses the uncomfortable contradiction at common law that allowed a party to admit in a pleading or other court document or testimony in court that the parties made a contract, but still hide behind the statute of frauds. Now, if a party admits a contract in “his pleading, testimony or otherwise in court,” the statute of frauds defense falls away.72 (Amended section 2–201 would have substituted “under oath” for “in court” to make it clear that depositions and the like taken outside of court constitute admissions under the section.)73 What’s more, the promisor doesn’t have to break down on the stand and admit “I did it, I made the contract,” such as in an old Perry Mason episode (hope you’ve seen a rerun). It is enough if the promisor admits facts sufficient to show that the parties made a contract.74 (For example, “I said I’d deliver the piano because she said she would pay me $2000.”) In addition, some courts refuse to dismiss or grant summary judgment on statute of frauds grounds before a promisee has the opportunity to examine the promisor under oath.75 One important limiting factor of section 2–201(3)(b) is that the admission exception applies only with respect to the “quantity of goods” admitted.76 If you made an oral agreement to sell Alice two pianos for $800 each, and she admits that she agreed to buy one piano, you can enforce a contract for one piano.
What do all of these exceptions have in common? They all involve situations where, even though an agreement is oral, evidence shows that the parties in fact made a contract. After all, it is not likely that a party made improvements on land, or manufactured a sign stating “Bob Hillman’s Writing Sanctuary,” or admitted a contract in court, or partly performed, unless that party really made an agreement.
E. DOES ANOTHER THEORY APPLY?
In Chapter 3, we discussed theories for enforcing promises other than bargained-for exchange, including promissory estoppel and unjust enrichment. Suppose parties make an oral agreement, the subject matter comes under the statute of frauds, and no exception to the writing requirement applies. A party cannot recover for breach of this oral agreement, but can she recover under promissory estoppel or unjust enrichment? In short, the answer is yes. Courts have enforced oral promises under both theories.77 For example, a prospective employee, Taylor Plantations, leaves his job in California and travels to Detroit, relying on Ford Motor Company’s oral promise of a two-year job. A landowner, Alice Williams, orally promises to convey land to Marvin Green’s daughter in exchange for room and board at Marvin’s home, which Marvin supplies for ten years. These exchanges would be enforceable as contracts only if they were in writing or an exception applied.78 Nevertheless, courts have enforced them on the basis of promissory estoppel and unjust enrichment respectively.79 Courts also have enforced oral promises for the sale of goods after a party relies, even though UCC section 2–201 lists a series of exceptions that does not include promissory estoppel.80 (Current section 2–201 includes a preamble stating that “[e]xcept as otherwise provided in this section,” a sales contract requires a writing, suggesting that exceptions not listed in the section, such as promissory estoppel, do not constitute exceptions.81 But courts sometimes apply promissory estoppel notwithstanding the preamble,82 and amended section 2–201 would omit the preamble, thereby inviting a greater use of promissory estoppel.83)
If we assume that the parties in the above examples really made the agreements described, enforcing the promises on the basis of alternative theories relieves the apparent injustice of the statute of frauds. Further, a promisee’s reliance on an oral promise or conferral of a benefit tends to show that the promise was genuine. However, critics charge that the use of alternative theories to circumvent the writing requirement contradicts the policies behind the statute of frauds, which was designed to prevent fraud.84 For example, suppose Taylor Plantations made up Ford’s promise of employment after traveling to Detroit to look for work. In addition, critics point out that a party may have to prove the existence of an oral agreement (something the statute of frauds is supposed to bar) in order to sustain a claim of promissory estoppel or unjust enrichment.85 For example, unless Marvin can show that he and Alice agreed to an exchange of room and board for the conveyance to Marvin’s daughter, a court may find that the benefit Marvin conferred on Alice was a gift. A possible solution to these misgivings would be to require an “enhanced promissory estoppel” burden based on “a kind or amount of reliance unlikely to have been incurred had the plaintiff not had a good-faith belief that he had been promised remuneration.”86
Those concerned about using unjust enrichment or promissory estoppel to enforce oral promises that are unenforceable under the statute of frauds should note that courts may limit the remedies under the latter theories.87 For example, the remedy for breach of Taylor’s employment contract would be Taylor’s expected salary minus what he reasonably could make in a substitute job.88 Under promissory estoppel, however, Taylor might recover only the costs incurred in his travel to Detroit and lost wages on his old job.89 You will learn much more about remedial differences between claims based on breach of contract and those based on other theories in the next chapter.
F. NOM CLAUSES
Suppose, in a written contract, you agree to sell your piano to Alice for $2000. Delivery will be in two weeks. Before delivery you and Alice orally and voluntarily agree to change the price to $1800. Your original signed contract, however, included what we in the know call a NOM clause (No Oral Modification clause). Is the enforceable price of the piano now $2000 or $1800?
You may think that, of course, the price is still $2000. The parties agreed that oral modifications would not be enforceable by agreeing to a NOM clause in the original contract. You could cite authority as well. UCC section 2–209(2) states in part that “[a] signed agreement which excludes modification or rescission except by a signed writing cannot be otherwise modified or rescinded * * *.” But would I discuss this issue if it were so easy? You have to worry about subsection (4) of 2–209, which states: “Although an attempt at modification or rescission does not satisfy the requirements of subsection (2) * * * it can operate as a waiver.” A waiver is an intentional and voluntary surrender of a right. Didn’t you agree to give up your right to $200 of the purchase price?
As you can guess, subsections (2) and (4) are hard to harmonize. The “can operate as a waiver” language causes headaches because it doesn’t tell us when an oral modification does operate as a waiver. If always, there is nothing left of subsection (2). In addition, what exactly is an “attempt at modification”? Does it simply require an oral agreement to modify? Does it require reliance?90 Ultimately, subsections (2) and (4) raise issues involving freedom of contract. Does freedom of contract mean that parties should have the power to bind themselves only to written modifications or does freedom of contract mean that parties have the power to change their minds about requiring only written modifications? Subsections (2) and (4) evidence the UCC’s drafters ambivalence about these issues, leading, of course, to lots of litigation and confusion.
1UCC § 2–201 (1996); see infra note 6, and accompanying text.
2See infra notes 47–54, and accompanying text.
3See id.
4An Act for prevention of Frauds and Perjuryes (Statute of Frauds) 1677, 29 Car. 2, c. 3 § 4 (Eng.), reprinted in 4 Chitty’s Statutes 1140 (W. H. Aggs ed., 6th ed. 1911).
[N]o action shall be brought (1) whereby to charge any executor or administrator upon any special promise, to answer damages out of his own estate; (2) or whereby to charge the defendant upon any special promise to answer for the debt, default or miscarriages of another person; (3) or to charge any person upon any agreement made upon consideration of marriage; (4) or upon any contract or sale of lands, tenements or hereditaments, or any interest in or concerning them; (5) or upon any agreement that is not to be performed within the space of one year from the making thereof; (6) unless the agreement upon which such action shall be brought, or some memorandum or note thereof, shall be in writing, and signed by the party to be charged therewith, or some other person thereunto by him lawfully authorized.
5Haw. Rev. Stat. § 656–1 (2002).
6See infra notes 28, 38, 56–59, 61–76, and accompanying text.
7McIntosh v. Murphy, 469 P.2d 177, 179 (Haw. 1970) (“The first English Statute was enacted almost 300 years ago to prevent ‘many fraudulent practices, which are commonly endeavored to be upheld by perjury and subornation of perjury.’ ”) (citing Statute of Frauds, 29 Car. 2, c. 3 (1677)); see also Estate of Stephens, 49 P.3d 1093, 1101 (Cal. 2002) (Kennard, J., dissenting) (“By requiring that the specified transactions be in writing and signed by the parties, the statute of frauds avoids the likelihood that permitting oral proof of such transactions would encourage fraudulent claims by swindlers gambling that they can glibly persuade a jury to enforce a nonexistent oral agreement.”).
8Lionel Morgan Summers, The Doctrine of Estoppel Applied to the Statute of Frauds, 79 U. Pa. L. Rev. 440, 441 (1931) (“Trial by jury was even more imperfect than now; there were no rules of evidence to speak of, and parties to the suit were not allowed to testify in their own behalf. It can readily be seen that, under such circumstances, it was of paramount importance to have written evidence of contracts, else a plaintiff could come into court and have a friend testify to a feigned contract, which a defendant would be powerless to disprove by his own testimony.”).
9Thomson Printing Mach. Co. v. B.F. Goodrich Co., 714 F.2d 744, 746 (7th Cir. 1983) (“[C]ourts then could not throw out jury verdicts manifestly contrary to the evidence.”); see also James J. O’Connell, Jr., Comment, Boats Against the Current: The Courts and the Statute of Frauds, 47 Emory L.J. 253, 257 (1998) (“In 1677 * * * [j]uries were no longer composed of knowledgeable locals who were familiar with the parties to the litigation and the nature of the dispute, but they were not yet ‘panels of disinterested strangers composing a tabula rasa on which the law of evidence would permit only certain facts to be inscribed.’ ”) (quoting Friedrich Kessler et al., Contracts: Cases and Materials 418, 754 (3d. ed. 1986)).
1043 L. Q. Rev. 1 (1927) (“Perhaps it is not inopportune to suggest that a dinner [in honor of the Statute’s 250th anniversary] be given in one of the Inns of Court. A suitable number of litigants, who have been cheated of their rights by means of this interesting and aged Statute, might be invited to give relish to the affair. If some of the defendants who have sheltered themselves behind its useful provisions are also asked, care will have to be taken that none of the silver disappears.”); H. C. & J. G. Ouston v. G. Scammell & Nephew Ltd., 1 All E.R. 59, 66 (Eng. C.A. 1940) (“[T]hat statute * * * has enabled more frauds to be committed than it has ever prevented * * *.”).
11Vernon v. Findlay, 4 All E.R. 311, 317 (K.B. 1938) (“I feel bound to say that this is a contract upon which no action can be brought. I say it with regret, because I think that undoubtedly [plaintiff] did work for these defendants* * *. I am bound to administer the law as I believe it to be * * *.”); Wakeham v. MacKenzie, 2 All E.R. 783, 785 (Ch. 1968) (“Nothing could have been more fraudulent to the way of thinking of the old equity lawyers than that [the promisor] * * *, having induced performance of the contract and enjoyed the benefits of that performance, should have repudiated his obligations in reliance on the statute.”).
12Summerlot v. Summerlot, 408 N.E.2d 820, 828 (Ind. Ct. App. 1980) (“The reason for the statute of frauds is quite simply to preclude fraudulent claims which would probably arise when one person’s word is pitted against another’s and which would open wide those ubiquitous ‘flood-gates of litigation.’ ”); Lawless v. Temple, 150 N.E. 176, 176 (Mass. 1926) (“The reason for the adoption of the rule requiring acceptance in writing, like the underlying reason for the statute of frauds and similar statutes, ‘is that sound policy requires some substantial evidence of the contract, and more reliable in its nature than the statement or recollection of witnesses.’ ”) (quoting Selma Sav. Bank v. Webster County Bank, 206 S.W. 870, 872 (Ky. 1918)).
13See Chapter 2, Section (A)(5).
14McIntosh, 469 P.2d at 180 n.3. See also Rosewood Care Ctr. v. Caterpillar, Inc., 877 N.E.2d 1091, 1099 (Ill. 2007) (“[W]hen the ‘main purpose’ or ‘leading object’ of the promisor/surety is to subserve or advance its own pecuniary or business interests, the promise does not fall within the statute [of frauds].”).
15See infra notes 18–27, and accompanying text.
16See infra notes 56–65, and accompanying text.
17See infra notes 77–89, and accompanying text.
18See supra note 5, and accompanying text.
19See supra note 6, and accompanying text.
20Haw. Rev. Stat. § 656–1(4).
21Id.; see also Purcell v. Miner, 71 U.S. 513, 517 (1866) (“Every day’s experience more fully demonstrates that this statute was founded in wisdom, and absolutely necessary to preserve the title to real property from the chances, the uncertainty, and the fraud attending the admission of parol testimony.”).
22Kent v. Humphries, 275 S.E.2d 176, 180 (N.C. Ct. App. 1981) (“Plaintiff may not rely on the oral lease, however, because it is barred by the statute of frauds * * *.”). But a judicially supervised transfer of an interest in land does not require a writing. Hogan Family Enters., Ltd. v. Town of Rye, 951 A.2d 159, 162 (N.H. 2008) (“A settlement requiring a party to transfer an interest in land is, generally, subject to the statute of frauds. We have long excepted, however, settlements ‘finalized under court supervision.’ ”) (quoting Byblos Corp. v. Salem Farm Realty Trust, 692 A.2d 514, 517 (N.H. 1997)).
23Haw. Rev. Stat. § 656–1(5).
24See supra note 14, and accompanying text.
25Johnson v. Diamond Shine, Inc., 890 F. Supp. 2d 763, 776 (W.D. Ky. 2012) (“Plaintiff argues that the oral contract could have been performed within a year because he could have died within a year. The Court agrees. A majority of cases hold that a promise of performance during the life [of] a specified person is not within statute of fraud provisions dealing with promises not to be performed within a year.”); Doherty v. Doherty Ins. Agency, Inc., 878 F.2d 546, 551–52 (1st Cir. 1989) (“A contract for lifetime employment is not subject to the statute of frauds, because the contract may be performed within one year if the employee happens to die within the year.”).
26Restatement (Second) of Contracts § 130, cmt. b (1981); see also Ferrera v. Carpionato Corp., 895 F.2d 818, 820 (1st Cir. 1990) (“It is true that [plaintiff] could have died within one year from the agreement’s inception. His death, however, would not have amounted to ‘performance’ of the contract. Rather, death would simply have excused him from performing the contract.”); Professional Bull Riders, Inc. v. AutoZone, Inc., 113 P.3d 757, 760 (Colo. 2005) (“[T]here is * * * little question that a promise of two or more performances, in the alternative, does not fall within the one-year provision if any one of the alternatives could be fully performed within one year.”); Deaton v. Tennessee Coal & R.R. Co., 59 Tenn. 650, 652 (1874) (“The performance of the contract might be defeated by the death of all the parties for whose benefit it was made, within the year; but that would not operate as a performance of the contract.”).
27Amended UCC § 2–201(4) (proposed final draft April 18, 2003).
28Amended UCC § 2–201(1).
29Haw. Rev. Stat. § 656–1; see also Spiegel v. Lowenstein, 147 N.Y.S. 655 (App. Div. 1914) (“Anything under the hand of the party sought to be charged admitting that he had entered into the agreement will be sufficient to satisfy the statute, which was only intended to protect parties from having parol agreements, dependent upon human recollection and veracity, imposed upon them.”).
30Bank of Am., N.A. v. Bradley, 54 Va. Cir. 351, 355 (Cir. Ct. 2000) (“[T]he court finds that there was an oral contract * * *. The court further finds that [promissor’s] * * * July 15 letters, read together, are sufficient written memoranda of the oral contract to satisfy the statute of frauds, thereby making the oral contract valid and enforceable.”); Brewer v. Horst-Lachmund Co., 60 P. 418, 419 (Cal. 1900).
31Restatement (Second) of Contracts § 131(a); see also Taylor v. Lester, 12 S.W.2d 1097, 1098 (Tex. Civ. App. 1928) (“The several writings signed by the parties by reference clearly identify the subject-matter of the contract and fully meet the requirements of the Statute of Frauds.”).
32Restatement (Second) of Contracts § 131(c); see also Beard v. Chase, 56 Misc. 3d 1202(A) (N.Y. Sup. Ct. 2017) (“The First Receipt and Second Receipt do not clearly identify the parties to the transaction, the specific artworks to be sold, or the time frame for compensation in order to create an enforceable contract * * *.”); Janus v. Sproul, 458 S.E.2d 300, 301 (Va. 1995) (“To satisfy the Statute of Frauds, a writing must contain the essential terms of the agreement it memorializes.”). A party can introduce extrinsic evidence to clarify the meaning of essential, but unclear terms, in order to satisfy the Statute of Frauds. See, e.g., Sterling v. Taylor, 152 P.3d 420, 428 (Cal. 2007) (“We hold that if a memorandum includes the essential terms of the parties’ agreement, but the meaning of these terms is unclear, the memorandum is sufficient under the statute of frauds if extrinsic evidence clarifies the terms with reasonable certainty and the evidence as a whole demonstrates that the parties intended to be bound.”).
33See, e.g., Preston Exploration Co., L.P. v. GSF, L.L.C., 669 F.3d 518, 523–24 (5th Cir. 2012) (“[M]ultiple writings pertaining to the same transaction will be construed as one contract.”); In re Fields, 449 B.R. 387, 396 (D. Minn. 2011) (“A combination of separate documents may be considered to satisfy the statute, if given at the same time and if related to the same transaction.”); Schremp v. Dubrowin, 263 A.2d 827, 833 (Md. 1970) (“This Court has fully accepted the rule that the memorandum required by the Statute of Frauds may consist of two writings if each indicates it relates to the same transaction and, though only one be signed by the party to be charged * * *.”).
34See Crabtree v. Elizabeth Arden Sales Corp., 110 N.E.2d 551, 554 (N.Y. 1953) (“[A]t least one writing, the one establishing a contractual relationship between the parties, must bear the signature of the party to be charged * * *.”).
35Horn & Hardart Co. v. Pillsbury Co., 888 F.2d 8, 11 (2d Cir. 1989) (“The signed writing must identify the transaction sufficiently to permit connection between the signed and unsigned writings.”); Crabtree, 110 N.E.2d at 554 (“[S]igned and unsigned writings [may] be read together, provided that they clearly refer to the same subject matter or transaction.”).
36Restatement (Second) of Contracts § 132; Hunt Oil Co. v. FERC, 853 F.2d 1226, 1241 (5th Cir. 1988) (“A ‘writing’ for purposes of the statute of frauds may consist of separate writings, connected together by express reference to each other or internal evidence of their unity, relation, or connection * * *.”); Marks v. Cowdin, 123 N.E. 139, 145 (N.Y. 1919) (“The memorandum exacted by the statute does not have to be in one document. It may be pieced together out of separate writings, connected with one another either expressly or by the internal evidence of subject matter and occasion.”).
37Restatement (Second) of Contracts § 133; Crabtree, 110 N.E.2d at 553 (“Each of the two payroll cards—the one initialed by defendant’s general manager, the other signed by its comptroller—unquestionably constitutes a memorandum under the statute. That they were not prepared or signed with the intention of evidencing the contract, or that they came into existence subsequent to its execution, is of no consequence; it is enough, to meet the statute’s demands, that they were signed with intent to authenticate the information contained therein and that such information does evidence the terms of the contract.”); see also Heffernan v. Keith, 127 So.2d 903, 904 (Fla. Dist. Ct. App. 1961) (“In the instant case, the plaintiff has met the requirements of the statute by presenting a telegram which by its terms refers to a certain proposed contract * * *.”).
38Wells, Waters & Gases, Inc. v. Air Prods. & Chems., Inc., 19 F.3d 157, 161 (4th Cir. 1994) (“Section 2–201(1), by its terms, does not bar the enforcement of the contract against [plaintiff] provided that the writing ‘indicates that a contract for sale has been made between the parties * * *.’ ”); Migerobe, Inc. v. Certina USA, Inc., 924 F.2d 1330, 1333 (5th Cir. 1991) (“In the case before us, the integration of two signed documents and one unsigned document tends to show that the parties had made a contract for sale.”).
39See Brown Dev. Corp. v. Hemond, 956 A.2d 104, 108 (Me. 2008) (“While a contract must be in writing, almost any writing is sufficient for statute of frauds purposes.”); but see CQ, Inc. v. TXU Mining Co., L.P., 565 F.3d 268, 275 (5th Cir. 2009) (“[A]n ‘oral agreement must be evidenced by a written memorandum which is complete within itself in every material detail, and which contains all of the essential elements of the agreement, so that the contract can be ascertained from the writings without resorting to oral testimony.’ ”) (quoting Conner v. Lavaca Hosp. Dist., 267 F.3d 426, 432 (5th Cir. 2001)) (discussing Texas law).
40Walbro Engine Management, LLC v. Surecan, Inc., 2017 WL 6345825, *5 (Ct. App. Mich. 2017) (“To establish a valid contract under the UCC, a quantity term must be specifically stated.”).
41UCC § 1–201(b)(37).
42See, e.g., 26 Beverly Glen, LLC v. Wykoff Newberg Corp., 334 F. App’x 62, 64 (9th Cir. 2009) (party must intend to use initials to authenticate); Monetti, S.P.A. v. Anchor Hocking Corp., 931 F.2d 1178, 1185 (7th Cir. 1991) (“It was a writing on [defendant’s] letterhead, so it satisfied the writing and signature requirements of the UCC statute of frauds.”); see also Barber & Ross Co. v. Lifetime Doors, Inc., 810 F.2d 1276, 1280 (4th Cir. 1987) (“The written sales brochures given by [defendant] to [plaintiff] met the requirements of the statute of frauds. The writings met the signature requirement because the [defendant’s] trademark appeared on the documents and that was sufficient to authenticate the documents.”).
43Haw. Rev. Stat. § 656–1.
44UCC § 2–201(1).
45See infra notes 55–65, 77–89, and accompanying text.
46Haw. Rev. Stat. § 656–1; UCC § 2–201(1).
47See Patricia Fry, X Marks the Spot: New Technologies Compel New Concepts for Commercial Law, 26 Loy. L.A. L. Rev. 607 (1993); see also Roger Edwards v. Fiddes & Son, Ltd., 245 F. Supp. 2d 251, 261 (D. Me. 2003) (accepting plaintiff’s argument that email’s “clearly constitute a writing, and the fact that the party to be charged with enforcement * * * authored emails with his salutation [sic] is sufficient to constitute a signature.”).
48See, e.g., Williamson v. Delsener, 874 N.Y.S.2d 41, 41 (App. Div. 2009) (“The e-mails exchanged between counsel, which contained their printed names at the end, constitute signed writings within the meaning of the statute of frauds and entitle plaintiff to judgment.” (citations omitted)); see also cases cited therein.
49Revised UCC § 1–201(b)(37) & (43).
50See, e.g., Bazak Int’l Corp. v. Tarrant Apparel Group, 378 F. Supp. 2d 377 (S.D.N.Y. 2005); see also Newmark & Co. Real Estate Inc. v. 2615 E. 17 St. Realty LLC, 914 N.Y.S. 2d 162, 164 (App. Div. 2011) (“An e-mail sent by a party, under which the sending party’s name is typed, can constitute a writing for purposes of the statute of frauds.”).
51Bazak Int’l Corp., 378 F. Supp. 2d at 384–85 (citing Apex Oil Co. v. Vanguard Oil & Serv. Co., 760 F.2d 417, 423 (2d Cir. 1985)).
52See, e.g., Nev. Rev. Stat. Ann. § 719.010 (West 2001); N.J. Stat. Ann. § 12A:12–1 (West 2001); Cloud Corp. v. Hasbro, Inc., 314 F.3d 289, 296 (7th Cir. 2002) (“Neither the common law nor the UCC requires a handwritten signature, * * * even though such a signature is better evidence of identity than a typed one.”); Hamdi Halal Market LLC v U.S., 947 F. Supp 2d. 159, 164 (D. Mass. 2013); Rapalo-Alfaro v. Lee, 173 So.3d 1174, 1182 (Ct. App. La. 2015).
53Electronic Signatures in Global and National Commerce Act, 15 USC § 7001 (2000) (Section 7001(a)(1) provides that a contract cannot be thrown out “solely because it is in electronic form.”).
54For a discussion, see, e.g., Holly K. Towle, E-Signatures—Basics of the U.S. Structure, 38 Hous. L. Rev. 921 (2001); see also Specht v. Netscape Commc’ns Corp., 306 F.3d 17, 27, n.11 (2d Cir. 2002) (“The parties do not dispute, nor could they, that the software license agreement at issue * * * is a ‘written provision’ despite being provided to users in a downloadable electronic form. The latter point has been settled by the Electronic Signatures in Global and National Commerce Act * * *.”); Roger Edwards, LLC. v. Fiddes & Son, Ltd., 245 F. Supp. 2d 251, 261 (D. Me. 2003) (“[E]-mails are sufficient under Maine law to meet the requirements of [the Statute of Frauds] * * *. This conclusion is consistent with [the Electronic Signatures in Global and National Commerce Act] * * *.”).
55See, e.g., Messner Vetere Berger McNamee Schmetterer Euro RSCG Inc. v. Aegis Group PLC, 711 N.E.2d 953, 956 (N.Y. 1999) (“[T]he doctrine of part performance is based on principles of equity, and, specifically, recognition of the fact that it would be a fraud to allow one party to a real estate transaction to escape performance after permitting the other party to perform in reliance on the agreement. Part performance alone, of course, is not sufficient. The performance must be unequivocally referable to the agreement.”); Richardson v. Taylor Land & Livestock Co., 171 P.2d 703, 709 (Wash. 1946) (“[T]he doctrine of part performance was established for the same purpose for which the statute of frauds itself was enacted, namely, for the prevention of fraud, and arose from the necessity of preventing the statute from becoming an agent of fraud, for it could not have been the intention of the statute to enable any party to commit a fraud with impunity.”) (quoting 49 Am. Jur. 725, Statute of Frauds, § 421); Brown v. Sutton, 129 U.S. 238, 242 (1889) (“[T]here can be little doubt that the delivery of possession to sufficient part performance to take the case out of the statute of frauds.”).
56UCC § 2–201(3)(c); see also Casazza v. Kiser, 313 F.3d 414, 418 (8th Cir. 2002) (“Under the part-performance exception to the statute of frauds, a writing is not required ‘with respect to goods for which payment has been made and accepted or which have been received and accepted.’ ”) (quoting Minn. Stat. § 336.2–201(3)(c) (2000)).
57In re Augustin Bros. Co., 460 F.2d 376, 380 (8th Cir. 1972) (“[P]art performance of an oral contract for the sale of goods that is capable of apportionment is enforceable only as to that portion that has been either fully or partially performed* * *. [E]nforcement of an oral contract for goods in which an advance payment has been made by the buyer is limited to that quantity of goods which the advance payment would buy at the market price.”).
58See, e.g., Sedmak v. Charlie’s Chevrolet, Inc., 622 S.W.2d 694, 699 (Mo. Ct. App. 1981) (“The present contract could not have contemplated less than one car. If the part payment is believed, it must have been intended to buy the entire car not a portion of the car. Thus, denying the contract because part payment cannot be apportioned encourages fraud rather than discouraging it.”).
59See Chapter 2.
60See Hayward v. Morrison, 241 P.2d 888, 894 (Or. 1952) (Plaintiff performed “acts of part performance which were performed in strict accordance with the oral agreement and directly in reference thereto. In such circumstances it would result in gross injustice and be wholly inequitable and unconscionable to permit defendant * * * to now take a position completely at variance with her prior acts and conduct.”).
61Winternitz v. Summit Hills Joint Venture, 532 A.2d 1089, 1092 (Md. Ct. Spec. App. 1987), cert. denied, 538 A.2d 778 (Md. 1988) (“The law is clear and well established that ‘part performance’ is an equitable doctrine available only where the principal relief sought is specific performance of the oral agreement. It has no application in an action at law for money damages.”); Trollope v. Koerner, 470 P.2d 91, 98 (Ariz. 1970) (“This court has squarely held that notwithstanding the procedural merger of law and equity, the equitable doctrine of part performance is inapplicable in a suit where only money damages are sought.”); see also Restatement (Second) of Contracts § 129, cmt. c.
62Johnson Farms v. McEnroe, 568 N.W.2d 920, 923–24 (N.D. 1997) (“Only one of the typically recognized acts of part performance—payment of the contract price—is generally expressly mentioned as a requirement under a contract. The two other most common acts that qualify under the doctrine of part performance—taking possession of the property and making improvements—may occur because of the existence of the contract, but they are not acts that are literally required for performance of the contract.”) (quoting 14 R. Powell and P. Rohan, Powell on Real Property, para. 880[2][a] at 81–63); William Henry Brophy Coll. v. Tovar, 619 P.2d 19, 22 (Ariz. Ct. App. 1980) (“Whether this doctrine is labeled ‘estoppel’ or ‘part performance’ does not affect the ultimate result of its application, which is that a party may be precluded from asserting the Statute of Frauds as a defense when he has induced or permitted another to change his position to his detriment in reliance on an oral agreement which would be within the Statute.”).
63In re Madsen’s Estate, 259 P.2d 595, 606 (Utah 1953) (“[Decedent] orally agreed to convey the property in dispute to the respondent corporation * * * at which time the latter paid him the purchase price and went into possession. There being part performance of that oral contract, the executor of [decedent’s] estate cannot plead the statute of frauds as a bar to the respondent’s action.”).
64In re Sipple, 400 B.R. 475, 478 (Bankr. W.D. Pa. 2009) (“The rule is well settled both in England and America, that if the vendee, under a verbal agreement for the purchase of real estate, expends labor or money in improving the same, the contract is thereby partly performed, and the Statute of Frauds has no application to it. In such a case the improvements by the vendee in possession constitute valuable and equitable consideration, and entitle him to specific execution to the contract, if he complies therewith fully on his part.”) (quoting 33 A.L.R. 1489 (1924)); William Henry Brophy Coll., 619 P.2d at 23 (“[Lessees’] making of improvements of a value approaching that of five months’ rent is inconsistent with a monthly tenancy and referable, as we see it, to a longer term. We therefore find as a matter of law that the uncontradicted evidence is sufficient to establish part performance of the alleged oral lease by appellees in reliance thereon, and that appellants are estopped from asserting its invalidity under the Statute of Frauds.”); Seavey v. Drake, 62 N.H. 393, 394 (1882) (“[E]quity protects a parol gift of land equally with a parol agreement to sell it, if accompanied by possession, and the donee has made valuable improvements upon the property induced by the promise to give it.”).
65Johnson Farms, 568 N.W.2d at 923 (“[T]hree major categories of acts by the purchaser that may make an oral contract enforceable: paying the contract price, taking possession of the property, and making improvements.”); id. at 924 (“The most important question is whether the part ‘performance’ is consistent only with the existence of the alleged oral contract.”) (quoting Buettner v. Nostdahl, 204 N.W.2d 187, 195 (N.D. 1973)); Breen v. Phelps, 439 A.2d 1066, 1074 (Conn. 1982) (“[T]he complaint before us * * * states acts of part performance which a trier might reasonably conclude to be sufficient to remove the case from the operation of the statute of frauds.”).
66See UCC § 2–104(1); see also Chapter 3, Section (C)(2).
67UCC § 2–201(2); see also Azevedo v. Minister, 471 P.2d 661, 665 (Nev. 1970) (“The custom arose among business people of confirming oral contracts by sending a letter of confirmation. This letter was binding as a memorandum on the sender, but not on the recipient, because he had not signed it. The abuse was that the recipient, not being bound, could perform or not, according to his whim and the market, whereas the seller had to perform. Obviously, under these circumstances, sending any confirming memorandum was a dangerous practice. Subsection (2) of section 2–201 of the Code cures the abuse by holding a recipient bound unless he communicates his objection within 10 days.”); Howard Constr. Co. v. Jeff-Cole Quarries, Inc., 669 S.W.2d 221, 226 (Mo. Ct. App. 1983).
68Azevedo, 471 P.2d 661, 665 (“ ‘All that is required is that the writing afford a basis for believing that the offered oral evidence rests on a real transaction.’ ”) (quoting Harry Rubin & Sons, Inc. v. Consolidated Pipe Co., 153 A.2d 472, 476 (Pa. 1959)); Howard Constr. Co., 669 S.W.2d at 227 (“[I]f it is more probable than not that the writing evidences a deal between the parties, then the writing should be found sufficient.”).
69UCC § 2–201(3)(a); see Webcor Packaging Corp. v. Autozone, Inc., 158 F.3d 354, 356 (6th Cir. 1998) (“[W]here a manufacturer produces special goods for a buyer, courts may permit evidence of the oral agreement at trial.”).
70Colo. Carpet Installation, Inc. v. Palermo, 668 P.2d 1384, 1389 (Colo. 1983) (“[F]our distinct criteria are necessary to satisfy the ‘specially manufactured goods’ exception to the statute of frauds: (1) the goods must be specially made for the buyer; (2) the goods must be unsuitable for sale to others in the ordinary course of the seller’s business; (3) the seller must have substantially begun to have manufactured the goods or to have made a commitment for their procurement; and (4) the manufacture or commitment must have been commenced under circumstances reasonably indicating that the goods are for the buyer and prior to the seller’s receipt of notification of contractual repudiation.”).
71Webcor Packaging Corp., 158 F.3d at 356; see also Impossible Elec. Techniques, Inc. v. Wackenhut Protective Sys., Inc., 669 F.2d 1026, 1036–37 (5th Cir. 1982) (“The Statute exempts contracts involving ‘specially manufactured’ goods from the writing requirement because in these cases the very nature of the goods serves as a reliable indication that a contract was indeed formed.”); see also Automated Cutting Technologies, Inc. v. BJS N. Am. E., Inc., 2012 WL 2872823, at *5 (E.D. Ky. 2012) (“The Court cannot find that completing 30% of an expressly stipulated initial quantity should qualify as substantially beginning manufacture of goods in putative years 2–5 of a contract.”).
72UCC § 2–201(3)(b); see also Fat Boy, LLC v. KCS Int’l, Inc., 462 F. App’x 393, 395 (4th Cir. 2012) (UCC § 2–201(3)(b) “plainly contemplates admission of an oral contract by the ‘party against whom enforcement is sought,’ not the party seeking to enforce the oral contract.”); Peterson v. Shore, 197 P.3d 789, 792 (Idaho Ct. App. 2008) (“A defendant’s admission of an unwritten contract during the course of litigation will prevent the defendant from relying upon the statute of frauds.”); Nebraska Builders Prods. Co. v. Industrial Erectors, Inc., 478 N.W.2d 257, 268 (Neb. 1992) (“The statutory requirement can be satisfied by way of pleadings, bills of particulars, depositions, affidavits, admissions pursuant to notices to admit, and oral testimony, including admissions made on cross-examination.”).
73Amended UCC § 2–201, preliminary cmt. 7.
74Nelson v. Brostoff, 689 P.2d 1056, 1060 (Or. Ct. App. 1984) (“[O]nce the party asserting the statute admits facts from which the existence of a contract can be inferred, the statute ceases to be a defense and proof can be offered to show that an agreement containing the statutory elements was reached.”); see also Neb. Builders Prods. Co., 478 N.W.2d at 268 (“We do not hereby hold that an admission is made whenever the defendant utters the magic words contract or agreement. We acknowledge the possibility that laypeople might misuse legal terminology * * *. [T]he court should look at the other evidence presented by the defendant * * *. [Defendants’] conduct indicates that an agreement between the parties existed.”).
75M & W Farm Serv. Co. v. Callison, 285 N.W.2d 271, 275 (Iowa 1979) (“[T]he party resisting the Statute should be given the opportunity to prove the alleged contract in two statutorily recognized ways: by the opposing party’s failure to deny the existence of the contract in its responsive pleading and by the opposing party’s emitting oral evidence of the contract.”).
76UCC § 2–201(3)(b).
77On promissory estoppel, see, e.g., Alaska Democratic Party v. Rice, 934 P.2d 1313, 1316 (Alaska 1997) (“[A] promise which the promisor should reasonably expect to induce action or forbearance on the part of the promisee or a third person and which does induce the action or forbearance is enforceable notwithstanding the Statute of Frauds if injustice can be avoided only by enforcement of the promise * * *.”) (citing Restatement (Second) of Contracts § 139); McIntosh v. Murphy, 469 P.2d 177, 180–81 (Haw. 1970) (“The doctrine of estoppel to assert the statute of frauds has been consistently applied by the courts of this state to prevent fraud that would result from refusal to enforce oral contracts in certain circumstances. Such fraud may inhere in the unconscionable injury that would result from denying enforcement of the contract after one party has been induced by the other seriously to change his position in reliance on the contract * * *.”) (quoting Monarco v. Lo Greco, 220 P.2d 737, 739 (Cal. 1950)). Not all courts agree, however. See, e.g., DK Arena, Inc. v. EB Acquisitions I, LLC, 112 So. 3d 85, 95 (Fla. 2013) (“We unequivocally rejected a promissory estoppel exception to Florida’s Statute of Frauds.”); Dumas v. Infinity Broad. Corp., 416 F.3d 671, 678 (7th Cir. 2005) (“[S]ince the statute of frauds applies with equal force under either a breach of contract or promissory estoppel theory * * * it is unnecessary for the courts to undertake a separate promissory estoppel analysis, for the statute of frauds per se cannot be satisfied.”).
On unjust enrichment, see Tenzer v. Superscope, Inc., 702 P.2d 212, 217 (Cal. 1985) (“[Defendant] has received the benefit of [plaintiff’s] performance but relies upon the statute of frauds to avoid paying the agreed-upon price. [T]hese allegations suggest a case of unjust enrichment * * *. In such cases, the doctrine of estoppel to assert the statute of frauds may be applied in the interests of fairness.”); Gay v. Mooney, 50 A. 596, 597 (N.J. Sup. Ct. 1901), aff’d per curiam, 52 A. 1131 (N.J. 1902) (“The bargain thus exhibited is not one on which an action at law could be maintained, because it related to land, and was not susceptible of such proof as the statute of frauds requires; but when, in pursuance of a bargain, for this reason unenforceable, services have been rendered, the legal remedy is by an action on the quantum meruit for the value of the services.”).
78See supra notes 20–26, and accompanying text.
79See supra note 77.
80Warder & Lee Elevator, Inc. v. Britten, 274 N.W.2d 339, 342 (Iowa 1979) (“We have long recognized promissory estoppel as a means of defeating the general statute of frauds * * *. We see nothing in [state law] which purports to require a different rule under the Uniform Commercial Code.”).
81UCC § 2–201(1).
82Warder & Lee Elevator, 274 N.W.2d at 341 (“Under this statute an oral contract for the sale of goods for a price of $500 or more is unenforceable, with certain stated exceptions. [Plaintiff] does not contend any of those exceptions is applicable. Promissory estoppel is not among them * * *. However, other courts which have considered the question have held the doctrine is available.”).
83Amended UCC § 2–201.
84See Philo Smith & Co. v. USLIFE Corp., 554 F.2d 34, 36 (2d Cir. 1977) (“The strongly held public policy reflected in New York’s Statute of Frauds would be severely undermined if a party could be estopped from asserting it every time a court found that some unfairness would otherwise result.”); McIntosh v. Murphy, 469 P.2d 177, 182 (Haw. 1970) (Abe, J., dissenting) (“I cannot agree, as intimated by this court, that we should circumvent the Statute of Frauds by the exercise of the equity powers of courts * * *. Thus, if the Statute of Frauds is too harsh as intimated by this court, and it brings about undue hardship, it is for the legislature to amend or repeal the statute and not for this court to legislate.”).
85Joseph M. Perillo, Restitution in a Contractual Context, 73 Colum. L. Rev. 1208 (1973).
86Classic Cheesecake Co., Inc. v. JPMorgan Chase Bank, N.A., 546 F.3d 839, 841 (7th Cir. 2008) (Posner, J.).
87Colorado Visionary Acad. v. Medtronic, Inc. 397 F.3d 867, 877 (10th Cir. 2005) (“[Restatement (Second) of Contracts § 139] includes an express command to limit remedies as justice requires. Thus, it is clear that a plaintiff is not necessarily entitled to all remedies that would have been available on a breach of contract claim.”).
88See Chapter 5, Section (A)(4)(b).
89See Chapter 5, Section (B); see also Jarboe v. Landmark Cmty. Newspapers of Ind., Inc., 644 N.E.2d 118, 122 (Ind. 1994) (“The doctrine of promissory estoppel may be available to an at-will employee, but the remedy is limited to damages actually resulting from the detrimental reliance and will not include the benefit of altering the employment * * *.”).
90UCC § 2–209(5) lets you retract a waiver “unless the retraction would be unjust in view of a material change of position in reliance on the waiver.”